DPAS Training Slides Final_November 2021.pptx

The Defense Priorities and
Allocations System
Training Course
2/29/2024

Course Overview
This course introduces the Defense Priorities and Allocations System (DPAS), a
regulation administered by the Department of Commerce (DOC) that
implements the priorities and allocations authority contained in Title 1 of the
Defense Production Act (DPA) of 1950.
The primary purpose of the DPAS regulation (15 CFR Part 700) is to ensure the
timely availability of industrial resources to meet national defense and
emergency preparedness requirements.
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Primary Audience
The primary audience for this course are individuals who work for companies
that receive contracts, subcontracts, or purchase orders from the U.S.
Government or from U.S. Government contractors.
In order to ensure the effectiveness of the DPAS, it is essential that any
individual who works for a company that receives or places a rated order
should be thoroughly familiar with, and must comply with, the provisions of
the DPAS regulation.
This training outlines some of the basic requirements that a company must
adhere to when accepting DPAS rated orders.
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Course Outline
The goal of this course is to provide a basic understanding of the DPAS and its
implementation. The course includes the major topics listed below.
1. What is the DPAS?
2. Overview of the Priorities and Allocations Authorities
3. Who has been delegated DPAS rating authority from the DOC?
4. Step by Step Guide: Processing Rated Orders
5. Who must comply with the DPAS?
6. How do I get assistance in the event of a problem?
7. What official actions does DOC utilize to implement/enforce the DPAS
Provisions?
8. How does the DOC ensure compliance with the DPAS regulation?
9. How does the DPAS provide me protection against claims?
10. Examples of DPAS Assistance
11. How is the DPAS used for Energy Programs?
12. Course Review
13. Frequently Asked Questions
14. DPAS Contact Information
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What is the DPAS?
The Defense Priorities and Allocations System (DPAS) is a
regulation administered by the Department of Commerce (DOC).
The DPAS implements the Title 1 priorities and allocations
authority contained in the Defense Production Act (DPA) of 1950,
that has been delegated to the Secretary of Commerce.
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What is the DPAS?
• The DPAS is used to prioritize national defense-related contracts/orders
throughout the U.S. supply chain in order to support:
– military programs
– energy programs
– homeland security
– emergency preparedness
– critical infrastructure
• The use of the DPAS is not limited to crises, emergency, or armed conflict.
• The DPAS can also be used to provide military or critical infrastructure
assistance to foreign nations.
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What is the DPAS?
The purpose of the DPAS is to:
• Ensure the timely availability of industrial resources (and associated
services) to meet current national defense and emergency preparedness
program requirements
• Provide authority to U.S. Government agencies (and other authorized
persons/entities) to order priority performance (i.e., delivery) on contracts
and orders as well as allocate materials to meet national security
requirements
• Provide an operating system to support rapid industrial response in a
national emergency
• Minimize disruption to normal commercial activities
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Overview of the
Priorities and Allocations
Authorities
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Overview of the Priorities
and Allocations Authorities
The graphic below provides an overview of the priorities and allocations authorities.
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Defense Production
Act of 1950,
50 U.S.C. 4501, et seq.
Executive Order
13603
DPAS Regulation
15 CFR Part 700
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Title 1 of the Defense Production Act of 1950 (DPA), as amended (50
U.S.C. 4501, et seq.) is the President’s primary authority to expedite
production/delivery of critical industrial items from the private
sector.
The National Defense Resources Preparedness Executive Order (E.O.
13603) delegates this authority to various agencies and addresses
national defense resource programs and policies under the DPA.
The DPAS regulation (15 CFR Part 700) implements the priorities
and allocations authority of the DPA with respect to industrial
resources.

Defense Production Act
• The DPA was enacted at the start of the Korean War as part of
a broad war and civil defense mobilization effort. The DPA
was created to ensure the availability of the country’s
industrial resources to address national security
requirements.
• The DPA authorities are time-limited and undergo periodic
amendment and reauthorization. The DPA was reauthorized
in the John S. McCain National Defense Authorization Act of
2019 and will expire in 2025.
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Under Title I of the DPA, the President is authorized to require:
• Preferential acceptance and performance of contracts or
orders (other than contracts of employment) supporting
certain approved national defense and energy programs
• To allocate materials, services, and facilities in such a manner
as to promote these approved programs
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The DPA’s definition of “national defense” includes programs for:
• Military and energy production or construction
• Military or critical infrastructure assistance to any foreign nation,
homeland security, stockpiling, space, and any directly related
activity
The definition also includes emergency preparedness activities
conducted pursuant to Title VI of The Robert T. Stafford Disaster Relief
and Emergency Assistance Act (42 U.S.C. 5195, et seq.) and critical
infrastructure protection and restoration.
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Title 1 of the DPA is the statutory basis for the National Defense
Resources Preparedness Executive Order (Executive Order
13603) and the DPAS Regulation (15 CFR Part 700).
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Executive Order 13603
• The purpose of the National Defense Resources Preparedness
executive order (Executive Order 13603) is to delegate
authority and address national defense resource programs
and policies under the DPA.
• Executive Order 13603 provides the framework for the
allocation of resources, services, and materials to promote
the national defense.
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Section 201 of Executive Order 13603 delegates the authority granted to the
President by the DPA (i.e., to require preferential acceptance and
performance of contracts/orders for approved programs, and to allocate
materials, services, and facilities to promote these approved programs) to the
following Federal agencies:
Agriculture (USDA)
Food resources, food resource facilities,
livestock resources, veterinary resources, plant
health resources, and the domestic distribution
of farm equipment and commercial fertilizer
Defense (DOD)
Water Resources
Energy (DOE)
All Forms of Energy
Transportation (DOT)
All Forms of Civil Transportation
Health and Human Services (HHS)
Health Resources
Commerce (DOC)
All Other Materials, Services, and Facilities
(including Construction Materials)
Generally called “Industrial Resources”
DPAS
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Each department, except the
Department of Defense (DOD), that
has been delegated DPA authority has
issued regulations. Each
department’s regulation covers only
their delegated resources outlined in
Section 201. For example, health
resources are outside DPAS
jurisdiction.
The figure to the right lists the
citations for each department’s
regulation.
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Presidential Delegations
(Executive Order 13603)
DOD (Water)
USDA (Food)
APAS
7 CFR Part 789
DOC (Industrial)
DPAS
15 CFR Part 700
DOE (Energy)
EPAS
10 CFR Part 217
HHS (Health)
HRPAS
45 CFR Part 101
DOT (Civil Transport)
TPAS
49 CFR Part 33
APAS – Agricultural Priorities and Allocations System
DPAS – Defense Priorities and Allocations System
EPAS – Energy Priorities and Allocations System
HRPAS – Health Resources Priorities and Allocations System
TPAS – Transportation Priorities and Allocations System
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Section 202 of Executive Order 13603 authorizes three agencies to
make the determination that a program is necessary or appropriate to
promote the national defense:
• Defense – regarding military production and construction, military
assistance to foreign nations, military use of civil transportation,
stockpiles managed by the Department of Defense (DOD), space,
and directly related activities
• Energy – regarding energy production and construction, distribution
and use, and directly related activities
• Homeland Security – regarding all other national defense programs,
including civil defense and continuity of Government.
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• Section 201 of Executive Order 13603 authorizes the
Secretary of Commerce to re-delegate the authority for the
priority rating of contracts and orders for all industrial
materials, services, and facilities needed in support of
programs approved under Section 202.
• The DOC implements this authority through the DPAS
regulation (15 CFR Part 700).
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DPAS Regulation:
15 CFR Part 700
• The DPAS regulation (15 CFR Part 700) implements the priorities
and allocations authority of the DPA with respect to industrial
resources.
• The DPAS regulation establishes procedures which requires
preferential acceptance and performance of contracts or orders for
industrial resources supporting certain national defense and energy
programs. The regulation also instructs the public on the DPAS
process and their obligations.
• This regulation is administered by DOC’s Bureau of Industry and
Security (BIS), and is used, as authorized by DOC/BIS, by other
Federal departments, agencies, and industry.
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Who has been delegated
DPAS rating authority
from the DOC?
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Who has been delegated DPAS
rating authority from the DOC?
The DOC has delegated the authority to place priority ratings on
contracts/orders (rated orders) necessary or appropriate to
promote the national defense, in accordance with the DPAS
regulation (15 CFR Part 700) to:
• Department of Defense (DOD)
• Department of Energy (DOE)
• Department of Homeland Security (DHS)
– Federal Emergency Management Agency (FEMA) is the
DPAS lead agency within DHS
• General Services Administration (GSA)
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Who has been delegated DPAS
rating authority from the DOC?
• The DOC may also authorize other
persons (including U.S. government
agencies; foreign governments; U.S.
and foreign contractors,
subcontractors, and suppliers; or
owners/operators of critical
infrastructure) to place rated orders on
a case-by-case basis.
• Such requests must first be
determined as necessary or
appropriate to promote the national
defense by DOD, DOE, or DHS.
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Step by Step Guide:
Processing Rated Orders
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Step by Step Guide:
Processing Rated Orders
Below are the five important steps to processing rated orders.
Step 1: What is a Rated Order and What Does it Mean for My Company?
Step 2: Identify Key Elements of Rated Order
Step 3: Accept or Reject the Rated Order
Step 4: Preferential Scheduling
Step 5: Extension of Priority Ratings
The following slides provide additional information on each step.
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Step 1:
What is a Rated Order and What
Does it Mean for My Company?
Prime Contract/Purchase Order
When a company is awarded a U.S. Government
(USG) contract or purchase order, it must determine
whether the contract/purchase order is rated.
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Subcontract/Flow-Down Purchase Order
When a company is awarded a subcontract or
receives a purchase order from another company, it
must determine whether the contract/purchase
order is rated.
• A rated order is a prime contract, a subcontract, or a purchase order issued in accordance with
the provisions of the DPAS regulation that supports an approved program.
• U.S. companies are required by law to accept “rated orders” and provide preferential
scheduling if necessary to meet required delivery date(s).
• Rated orders take preference over all unrated orders as necessary to meet required delivery
dates; therefore, persons are required to reschedule unrated orders if they conflict with
performance against a rated order.
• Companies that have received rated orders must in turn place rated orders with its suppliers
for the items they need to fill these orders.
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Rated Order:
Important Notes
• DPAS provisions are a standard part of the U.S.
defense contracting process.
• The DPAS is a standard clause in DOD
contracts/orders.
• The DOD uses DPAS authority delegated to it
by the DOC to place ratings on approximately
300,000 contracts annually. The Departments
of Commerce and Defense estimate that, in
addition, approximately 400,000 rated orders
are “flowed down” annually through the
supply chain to support those rated orders.
• Direct commercial sales to foreign persons are
NOT priority rated unless authorized by DOC.
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Step 1:
What is a Rated Order and What
Does it Mean for My Company?
Prime Contract/Purchase Order
• For a prime contract/purchase order, a company
will most likely receive a standard acquisition
form known as the SF-33 (Solicitation, Offer and
Award Form).
• On a SF-33, a company can determine whether
it has received a rated order by looking at Block
1 of the form. If it is a rated order, a priority
rating will be given. The following slide provides
an example of this form.
• NOTE: If you do not receive a SF-33 form, there
should be language in the contact/purchase
order indicating it is rated and a priority rating
must be given. Certain exceptions apply.
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Subcontract/Flow-Down Purchase Order
• When a company is awarded a subcontract or
receives a purchase order from another
company, it must determine whether the
contract/purchase order is rated.
• For a subcontract/flow-down purchase order,
there should be language in the
contract/purchase order indicating that it is a
rated order and a priority rating should be
given.
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Example of SF-33
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Block 1 of the SF-33
indicates whether the
contract/purchase is a
rated order.
NOTE: If you do not receive
a SF-33 form, there should
be language in the
contact/purchase order
indicating it is rated and a
priority rating should be
given.
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Step 2: Identify Key
Elements of Rated Order
If a company is in receipt of a rated contract or purchase order, the
company must identify the four key elements of a rated order outlined
in 15 CFR § 700.12 and listed below.
1. Priority Rating
2. Required Delivery Date(s)
3. Authorized Written or Digital Signature
4. A Certification Statement
These four elements must appear on every contract, purchase order,
or delivery order. If they do not appear, the company should request a
completed rated order from the customer. To learn more about these
key elements, please see the following slides for additional
information on each element.
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Priority Rating
15 CFR § 700.11
Rated orders are identified by a priority rating. A
priority rating consists of the rating symbol and a
program identification symbol.
Priority Rating = (Rating Symbol) + (Program ID Symbol)
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Priority Rating
15 CFR § 700.11
There are two levels of priority established by the DPAS regulation, identified
by the rating symbols “DX” and “DO”:
1. DX – All DX rated orders have equal priority and take preference
over DO and unrated orders (based on shipment schedule).
2. DO – All DO rated orders have equal priority and take preference
over unrated orders (based on shipment schedule).
Note: DX ratings can only be approved by the Secretary of Defense or the
Deputy Secretary of Defense.
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Priority Rating
15 CFR § 700.11
Program identification symbols indicates which approved
program is being supported by a rated order.
– The list of approved programs and their identification
symbols are listed in Schedule I of the DPAS regulation (15
CFR Part 700). Companies must ensure the symbol used is
valid.
– It is also important to note that program identification
symbols, in themselves, do not connote any priority.
The following slides provide the list of approved program found
in Schedule I.
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Schedule I to Part 700
Approved Programs and Delegate
Agencies
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Agencies (continued)
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Agencies (continued)
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Priority Rating
15 CFR § 700.11
Example of a Priority Rating:
If a company receives a rated order on a contract for the
production of an aircraft, the order will will contain a DO-A1 or
DX-A1 priority rating.
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Example
DOA1 = (DO) + (A1) <Aircraft>
DXA1 = (DX) + (A1) <Aircraft>
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Required Delivery Date(s)
• Rated orders are required to have a delivery date or dates.
• The words “immediately” or “as soon as possible” do not constitute a
delivery date.
• A ‘‘requirements contract,” ‘‘basic ordering agreement,” ‘‘prime vendor
contract,” or similar procurement document bearing a priority rating may
contain no specific delivery date or dates and may provide for the
furnishing of items from time-to-time or within a stated period against
specific purchase orders, such as ‘‘calls,” ‘‘requisitions,’’ and ‘‘delivery
orders.’’
– These purchase orders must specify a required delivery date or dates
and are to be considered as rated as of the date of their receipt by the
supplier and not as of the date of the original procurement document.
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Authorized Written or
Digital Signature
• The written signature on a manually placed order, or the
digital signature or name on an electronically placed order, of
an individual authorized to sign rated orders for the person
placing the order is required.
• The signature or use of the name certifies that the rated order
is authorized under the DPAS regulation and that the
requirements of the DPAS regulation are being followed.
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Certification Statement
A certification statement is required on the rated order
and should read in substance:
This is a rated order certified for national defense use,
and you are required to follow all the provisions of the
Defense Priorities and Allocations System regulation (15
CFR Part 700).
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Certification Statement
If a rated order is placed for the purpose of emergency
preparedness requirements and expedited action is necessary or
appropriate to meet these requirements, the following
statement must be included in the order:
This rated order is placed for the purpose of emergency
preparedness. It must be accepted or rejected within [Insert a
time limit no less than the minimum applicable time limit
specified in §700.13(d)(2)].
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Step 3: Accept or Reject
the Rated Order
Once a company has identified that it has received a rated order,
the company must either accept or reject the order and provide
customer notification according to the instructions provided in
the DPAS regulation (15 CFR § 700.13).
The topics below will be covered in the following slides:
• Mandatory Acceptance
• Mandatory Rejection
• Optional Rejection
• Customer Notification Requirements
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Mandatory Acceptance
15 CFR § 700.13 (a)
• Any company in the United States must accept and fill a rated
order for items that the company normally supplies.
• A company may not discriminate against rated orders in any
manner, such as by charging higher prices or by imposing
different terms and conditions than for comparable unrated
orders.
• If a company accepts a rated order, the company must meet
the requirements of that rated order, such as delivery date.
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Mandatory Rejection
15 CFR § 700.13 (b)
• A company may not accept a rated order for delivery on a
specific date if is unable to meet that date.
– However, the company must inform the customer of the earliest date
on which delivery can be made and offer to accept the order on the
basis of that date.
• The existence of previously accepted unrated or lower rated
orders is not sufficient reason for rejecting a rated order.
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Optional Rejection
15 CFR § 700.13 (c)
A company may reject a rated order in any of the following cases as
long as it does not discriminate among customers:
1. If the customer placing the order is unwilling or unable to meet
regularly established terms of sale or payment.
2. If the order is for an item not supplied or a service not performed.
3. If the order is for an item produced, acquired, or provided only for the
company’s own use for which no orders have been filled for two years
prior to the date of the receipt of the rated order. If, however, the
company has sold some of these items, it must accept rated orders up
to the quantity or portion of production, whichever is greater, sold
within the past two years.
4. If the customer placing the order, other than the U.S. Government,
makes the item or performs the service being ordered.
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Customer Notification Requirements
15 CFR § 700.13 (d)(1)
• A company must accept or reject a rated order in writing (hard copy), or in
electronic format, to the customer placing the order within 15 working days after
receipt of a DO rated order and 10 working days after receipt of a DX rated order.
• If the order is rejected, a company must provide the reasons in writing for the
rejection.
• If a company has accepted a rated order and subsequently finds that the shipment
or performance will be delayed, the company must notify the customer
immediately, give the reasons for the delay, and advise of new shipment or
performance date. If notification is given verbally, written (hard copy) or
electronic confirmation must be provided within one working day of the verbal
notice.
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• If a rated order is placed for the purpose of emergency preparedness
requirements and expedited action is necessary or appropriate to meet these
requirements, and the order includes the statement set forth in 700.12(b), a
company must accept or reject the rated order (in writing or electronically).
– If the order is issued by an authorized person in response to a hazard that has
occurred, the minimum time for acceptance or rejection is six hours after
receipt.
– If the order is issued by an authorized person to prepare for an imminent
hazard, the minimum time for acceptance or rejection is 12 hours after
receipt.
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Customer Notification Requirements
15 CFR § 700.13 (d)(2)
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Step 4:
Preferential Scheduling
• Once a company has accepted a rated order, it must then schedule
operations, including the acquisition of all needed production
items, in order to satisfy the delivery requirements of each rated
order.
• Companies are required to reschedule unrated orders if they
conflict with performance against a rated order and must
reschedule DO rated orders if they conflict with performance
against a DX rated order.
• The DPAS regulation (15 CFR § 700.14) describes the requirements
for preferential scheduling in further detail.
• The following slide provides examples of preferential scheduling.
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Preferential Scheduling
Examples
Below are examples of how preferential scheduling would be applied:
• Example 1: If a company receives a DO rated order with a delivery
date of June 3 and if meeting that date would mean delaying
production or delivery of an item for an unrated order, the unrated
order must be delayed.
• Example 2: If a DX rated order is received calling for delivery on July
15 and a company has a DO rated order requiring delivery on June 2
and operations can be scheduled to meet both deliveries, there is
no need to alter production schedules to give any additional
preference to the DX rated order.
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Step 5: Extension of
Priority Ratings
• Companies that receive rated orders
must in turn place rated orders with its
suppliers for the items it needs to fill
the rated orders.
• This continues from contractor to
subcontractor to supplier throughout
the entire supply chain.
• Companies must use the priority rating
indicated on the customer’s rated
order, except as otherwise provided in
the DPAS regulation or as directed by
the DOC.
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Step 5: Extension of
Priority Ratings
• A person is not required to place a priority rating on an order
for less than $75,000, or one half of the Simplified Acquisition
Threshold (as established in the Federal Acquisition
Regulations (FAR)), whichever amount is greater, provided
that delivery can be obtained in a timely fashion without the
use of the priority rating.
• More information regarding extension of priority ratings can
be found in 15 CFR § 700.15.
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Additional Information
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Additional Information
The DPAS Regulation provides additional information that a company in
receipt of a rated order should be aware of. The topics below are covered in
the following slides:
• Changes or Cancellations of Priority Ratings and Rated Orders (15 CFR § 700.16)
• Use of Rated Orders (15 CFR § 700.17)
• Limitations on Placing Rated Orders (15 CFR § 700.18)
• Records and Reports (15 CFR § 700.91)
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Additional Information:
Changes or Cancellations
The DPAS Regulation (15 CFR § 700.16) identifies how priority ratings and
rated orders may be changed or cancelled. For example:
• The priority rating on a rated order may be changed or cancelled by:
– An official action of the Department of Commerce
– Written notification from the person who placed the rated order (including a
Delegate Agency)
• If an unrated order is amended to make it a rated order, or a DO rating is changed
to a DX rating, the supplier must give the appropriate preferential treatment to
the order as of the date the change is received by the supplier.
• An amendment to a rated order that significantly alters a supplier’s original
production or delivery schedule shall constitute a new rated order as of the date
of its receipt. The supplier must accept or reject the amended order according to
the provisions of § 700.13.
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Changes or Cancellations
Examples continued:
• The following amendments do not constitute a new rated order: a change
in shipping destination; a reduction in the total amount of the order; an
increase in the total amount of the order which has negligible impact
upon deliveries; a minor variation in size or design; or a change which is
agreed upon between the supplier and the customer.
• If a person no longer needs items to fill a rated order, any rated orders
placed with suppliers for the items, or the priority rating on those orders,
must be cancelled.
• When a priority rating is added to an unrated order, or is changed or
cancelled, all suppliers must be promptly notified in writing.
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Use of Rated Orders
The DPAS Regulation (15 CFR § 700.17) identifies how rated orders must, and
can, be used.
Below are a few examples of the instructions found in 15 CFR § 700.17:
• A company must use rated orders to obtain:
– Items which will be physically incorporated into other items to fill rated
orders, including that portion of such items normally consumed, or converted
into scrap or by-products, in the course of processing;
– Containers or other packaging materials required to make delivery of the
finished items against rated orders;
– Services, other than contracts of employment, needed to fill rated orders;
and
– MRO needed to produce the finished items to fill rated orders.
• A person may use a rated order to replace inventoried items (including finished
items) if such items were used to fill rated orders, as follows:
– The order must be placed within 90 days of the date of use of the inventory.
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Limitations on Placing Rated Orders
The DPAS regulation (15 CFR § 700.18) outlines limitations on
placing rated orders. Such limitations include:
• A person may not place a DO or DX rated order unless entitled
to do so under the DPAS regulation.
• Rated orders may not be used to obtain:
– Delivery on a date earlier than needed,
– A greater quantity of the item than needed (with
exception), or
– Items in advance of the receipt of a rated order (with
exception).
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Records and Reports
The DPAS regulation (15 CFR § 700.91) outlines the recordkeeping and
reporting requirements a company must adhere to.
Below are a few examples of the important requirements:
• A company is required to make and preserve for at least three years, accurate and
complete records for any transaction covered by the DPAS regulation or an official
action.
• Records must be maintained in sufficient detail to permit the determination, upon
examination, of whether each transaction complies with the provisions of this part
or any official action.
• Records required to be maintained must be made available for examination on
demand by duly authorized representatives of the DOC.
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Important Notes
• Immediately notify the customer when you can’t meet a
delivery date, such as when a DX request is received that
overrides a DO request.
• If a company notifies the customer verbally, they should
provide written notification one working day later.
– This could trigger a Special Priorities Assistance (SPA)
Request. SPAs will be covered in this training.
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Who must comply with the
DPAS?
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Who must comply
with the DPAS?
• All companies in the United States must comply with the
provisions of the DPAS regulation.
• Any person who places or receives a rated order should be
thoroughly familiar with, and must comply with, the
provisions of the DPAS regulation.
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How do I get assistance in
the event of a problem?
Special Priorities Assistance
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Special Priorities
Assistance
• The DPAS is designed to be largely self-executing; however,
problems may arise from time-to-time.
• In the event of a problem, a person should immediately
contact the appropriate contract administration officer for
guidance or assistance.
• If additional formal aid is needed, special priorities assistance
(SPA) should be sought from the Delegate Agency through the
contract administration officer.
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Special Priorities
Assistance
• SPA can be provided for any reason in support of the DPAS regulation,
such as:
– Assisting in obtaining timely deliveries of items needed to satisfy rated
orders
– Authorizing the use of priority ratings on orders to obtain items not
normally ratable under this regulation
• A request for special priorities assistance or priority rating authority must be
submitted on Form BIS-999 to the local contract administration
representative.
– Form BIS-999 may be obtained from the Delegate Agency
representative or from the Department of Commerce.
– A sample of Form BIS-999 can be found in the following slide.
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Example:
SPA Form BIS-999
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This form can be found as
Appendix I to 15 CFR 700
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Special Priorities
Assistance
The following topics are covered in the DPAS regulation regarding SPA. The
following slides provide additional information:
• Requests for Priority Rating Authority (15 CFR § 700.51)
• Examples of Assistance (15 CFR § 700.52)
• Criteria for Assistance (15 CFR § 700.53)
• Instances where assistance will not be provided (15 CFR § 700.54)
• Assistance programs with Canada and other nations (15 CFR § 700.56)
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SPA: Requests for
Priority Rating Authority
• If a rated order is likely to be delayed because a person is unable to
obtain items not normally rated under 15 CFR Part 700, the person
may request the authority to use a priority rating in ordering the
needed items. Examples include:
– Production or construction equipment;
– Computers when not used as production items; and
– Expansion, rebuilding, or replacing plant facilities.
• In certain cases and upon specific request, the DOC, in order to
promote the national defense, may authorize a person to place a
priority rating on an order to a supplier in advance of the issuance
of a rated prime contract.
• For more information, see 15 CFR § 700.51.
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SPA: Examples of
Assistance
While special priorities assistance may be provided for any
reason in support of 15 CFR 700, it is usually provided in
situations where:
• There is difficulty in obtaining delivery against a rated order
by the required delivery date.
• Delivery conflicts need to be resolved.
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SPA: Criteria for
Assistance
Requests for special priorities assistance should be timely, that
is, the request has been submitted promptly and enough time
exists for the Delegate Agency or Commerce to effect a
meaningful resolution to the problem, and must establish that:
• There is an urgent need for the item
• The applicant has made a reasonable effort to resolve the
problem
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SPA: Instances Where Assistance
May Not Be Provided
Examples of when assistance may not be provided:
• Secure a price advantage
• Obtain delivery prior to the time required to fill a rated order
• Gain competitive advantage
• Overcome a supplier’s regularly established terms of sale or
conditions of doing business
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SPA: Assistance Programs with
Canada and Other Nations
• To promote military assistance to foreign nations, this
section provides for authorizing priority ratings to persons
in Canada and in other foreign nations to obtain items in
the United States in support of approved programs.
• Although priority ratings have no legal authority outside of
the United States, this section also provides information on
how persons in the United States may obtain informal
assistance from countries that the U.S. Government has
security of supply arrangements with in support for
approved programs.
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• Security of supply is a non-binding arrangement concluded by the U.S.
Government with a foreign partner to provide reciprocal priorities
support.
• The U.S. Government has security of supply arrangements with the
following countries:
– Australia
– Canada (MOU)
– Finland
– Italy
– The Netherlands
– Spain
– Sweden
– United Kingdom
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• Arrangements establish a process to request priority acceptance
and performance of contracts, subcontracts, and purchase orders to
address national defense needs.
– Provides U.S. assurance of meeting requests via the DPAS
– Provides foreign assurance via an Industry Code of Conduct
• Assistance can be requested by Governments, contractors,
subcontractors, or suppliers.
• Not limited to crises, emergency, or armed conflict.
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What official actions does DOC
utilize to implement/enforce
the DPAS Provisions?
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Official Actions
When necessary, the Department of Commerce may take
specific official actions to implement or enforce the DPAS
regulation, including the issuance of:
• Rating Authorization (15 CFR Part § 700.61)
• Directives (15 CFR Part § 700.62)
• Letters of Understanding (15 CFR Part § 700.63)
Please see the following slides for additional information on each
topic.
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Official Actions:
Rating Authorization
An official action granting specific priority rating authority that
permits a person to place a priority rating on an order for an
item not normally ratable under this regulation, or authorizes a
person to modify a priority rating on a specific order or series of
contracts or orders.
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Official Actions:
Directives
• An official action requiring a company to deliver an item or
take other action within a specified time frame.
• A company must comply with each Directive issued, however,
a company may not use or extend a Directive to obtain any
items from a supplier, unless expressly authorized to do so in
the Directive.
• Directives take precedence over all DX rated orders, DO rated
orders, and unrated orders previously or subsequently
received, unless a contrary instruction appears in the
Directive.
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Official Actions: Letters
of Understanding
• An official action which may be issued in resolving SPA
requests to reflect an agreement reached by all parties (DOC,
the Delegate Agency, the supplier, and the customer).
• A Letter of Understanding is used to confirm production or
shipping schedules which do not require modifications to
other rated orders.
• A Letter of Understanding is NOT used to alter scheduling
between rated orders, to authorize the use of priority ratings,
to impose restrictions under this regulation, or to take other
official actions.
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How does the DOC ensure
compliance with the DPAS
regulation?
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DPAS Compliance
Compliance with the DPAS regulation is outlined in 15 CFR § 700.70-
75:
• DOC works closely with the DPAS Delegate Agencies (DOD, DOE,
and DHS) to ensure compliance with the DPAS regulation.
• Willful violation of the provisions of Title I or Sections 705 or 707 of
the DPA, the priorities provisions of the Selective Service Act and
related statutes or this part is a crime and upon conviction, a
person may be punished by fine or imprisonment, or both. The
maximum penalty provided by the DPA is a $10,000 fine, or one
year in prison, or both.
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How does the DPAS provide
me protection against
claims?
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Protection Against
Claims
Protection against claims related to DPAS implementation is
outlined in 15 CFR § 700.90:
• A company shall not be held liable for damages or penalties
for any act or failure to act resulting directly or indirectly from
compliance with the DPAS or official DPAS action.
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Examples of DPAS
Assistance
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Examples of DPAS
Assistance
DOC works closely with DOD to ensure materials to support critical programs
receive appropriate priority.
Examples of DPAS assistance in Iraq and Afghanistan:
• Body Armor
• Mine Resistant Ambush Protected vehicles
• Counter-Improvised Explosive Devices
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Examples of DPAS
Assistance
Foreign Requests:
• Resolving delivery delays for critical
items (e.g., night vision/thermal
imaging equipment, ammunition,
aircraft spare parts)
• Supporting NATO operations in
Afghanistan and counter-terrorism
activities
• Requests supporting non-binding
“Security of Supply” arrangements
with foreign partners that provide for
reciprocal priorities support
• Requests from non-Security of Supply
foreign partners
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Examples of FEMA
Approved Assistance
• Federal emergency preparedness, mitigation,
response, and recovery
• State, local, tribal government emergency
preparedness, mitigation, response, and
recovery
• Intelligence and warning systems
• Border and transportation security
• Domestic counter-terrorism, including law
enforcement
• Chemical, biological, radiological, and nuclear
countermeasures
• Critical infrastructure protection and
restoration
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How is the DPAS used for
Energy Programs?
Industrial Priorities for Energy
Programs
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Industrial Priorities for
Energy Programs
The DPA authorizes the use of priority ratings for projects which
maximize domestic energy supplies. These projects are outlined
in the DPAS regulation (15 CFR § 700.20) and include:
• Those which maintain or further domestic energy exploration,
production, refining, and transportation;
• Maintain or further the conservation of energy; or
• Are involved in the construction or maintenance of energy
facilities.
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Industrial Priorities for
Energy Programs
The DPAS regulation (15 CFR § 700.21) outlines the application process for a
priority rating authorization for an energy program.
• For projects believed to maximize domestic energy supplies, a person may request priority
authority for scarce, critical, and essential supplies of materials, equipment, and services
(related to the production of materials or equipment, or the installation, repair, or
maintenance of equipment) by submitting a request to the DOE.
• If the DOE notifies the DOC that the project maximizes domestic energy supplies and that the
materials, equipment, or services are critical and essential, the DOC will determine whether
the items in question are scarce, and, if they are scarce, whether there is a need to use the
priority rating.
• After the DOC has conducted its analysis, it will advise the DOE of its findings as outlined in
the regulation. If the findings are satisfied, the DOC will authorize the DOE to grant the use
of a priority rating to the applicant.
• Schedule I of the DPAS regulation includes a list of approved programs to support the
maximization of domestic energy supply. A DOE regulation setting forth the procedures and
criteria used by the DOE in making its determination and findings is published in 10 CFR Part
216.
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Course Review
Below is a quick review of the rated contract or order process.
96
Companies who receive rated orders
must in turn place rated orders with their
suppliers for the items they need to fill
the orders. This continues from
contractor to subcontractor to supplier
throughout the entire supply chain.
All U.S. companies are required by law to
accept rated orders and provide
preferential scheduling if necessary to
meet required delivery date(s).
A rated order is a prime contract, a
subcontract, or a purchase order issued
in accordance with the provisions of the
DPAS regulation that supports an
approved program.
Three agencies (DOD, DOE, and DHS)
make determinations that a program is
necessary or appropriate to promote the
national defense.
Program Approval
A program is determined to
be necessary or appropriate
to promote the national
defense.
Contract Awarded
A DPAS rated order is
awarded for the approved
program.
Prime Contractor
The prime contractor
receives the DPAS rated
order.
Subcontractor 1
The prime contractor flows
down the DPAS rating to its
subcontractors.
Subcontractor 2
The prime contractor flows
down the DPAS rating to its
subcontractors.
2/29/2024

Frequently Asked
Questions
Q: May I accept a rated order contingent upon obtaining necessary production materials or equipment?
A: No. Rated orders may not be accepted on a contingent basis. If you cannot meet the required delivery date, you must inform
your customer of the earliest date on which delivery can be made, and offer to accept the order on the basis of that date.
Q: If I encounter production or shipment conflicts following acceptance of several rated orders of equal priority status that will
result in delayed delivery or performance against one or more orders, which of the conflicting orders should be given delivery
or performance preference?
A: You should give preference to order or orders in the sequence in which delivery or performance is required. For conflicting rated
orders received on the same day, you should give preference to the order or orders with the earliest receipt date. If you cannot
otherwise resolve the delivery or performance conflict, or if your customer objects to the rescheduling of the delayed order, you
should promptly request special priorities assistance (SPA). For any order that will be delayed, you must notify your customer as
provided in 15 CFR § 700.13(d)(3) of the DPAS regulation. Conflicting rated orders are discussed in section 700.14(c) of the DPAS
regulation.
Q: Can my suppliers charge a higher price to produce, deliver, or perform against my rated order?
A: No. Your supplier may not discriminate against your rated order in any manner. Nor may the supplier impose any different
terms or conditions than for comparable unrated orders.
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Frequently Asked
Questions
Q: May I use a rated order to purchase finished items, components, or production materials from a foreign supplier?
A: No. The DPAS, and therefore priority ratings, has no legal standing outside of the United States. However, if you need
assistance to obtain items from a supplier in Canada, you must submit a request through the Delegate Agency to the DOC/BIS’s
Office of Strategic Industries and Economic Security (SIES) on form BIS-999.
If you need assistance to obtain items from a supplier in Australia, Finland, Italy, the Netherlands, Spain, Sweden, and the United
Kingdom, you should contact the Department of Defense DPAS Lead in the Office of Deputy Assistant Security of Defense for
Manufacturing and Industrial Base Policy (MIBP). Please see 15 CFR § 700.57 (c) for more information.
Q: If my supplier refuses to accept or comply with a rated order, what should I do?
A: You should attempt to obtain the reason for the refusal in writing. If the reason conforms to any of the provisions in section
700.13 (b) or (c) of the DPAS regulation, you should first seek an alternative source of supply. If there is no alternative source that
can meet your requirements, you should promptly contact your customer or DOC/BIS. If the supplier refuses to give a reason or the
reason does not conform to the provisions of section 700.13, you should promptly contact your customer or DOC/BIS.
Q: Must I accept a rated contract or order from a customer with whom I have never done business?
A: Yes. Except as provided in the DPAS in 15 CFR § 700.13, you must accept and fill all rated orders you receive.
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Frequently Asked
Questions
Q: If by accepting a rated order I must delay delivery against unrated orders, am I protected against claims for my customers for
damages caused by this delay?
A: Yes. Such protection is provided under Section 707 of the Defense Production Act of 1950. See section 700.90 of the DPAS. You
may not be held liable for damages or penalties for any act or failure to act resulting directly or indirectly from compliance with
any provision of the statute, the DPAS, or a Directive issued by DOC/BIS.
Q: If I use inventoried items to fill a rated order, may I replace those items by using a rated order?
A: Yes. You may use a rated order to replace inventoried items if you place the order with your supplier within 90 days of the date
of use of the items. However, you may only use the DO rating symbol on the order, even if the customer’s order was DX.
Q: To Fill a rated order, I need to purchase a quantity of items that is less than my supplier’s minimum (commercially
procurable) quantity. Is my supplier obligated to accept and fill a rated order for such quantity?
A: No. However, as provided in section 700.17(e) of the DPAS and if reasonable to do so, you may place a rated order for the
minimum commercially procurable quantity. If possible, you must combine rated orders to the supplier as provided in section
700.17(c) and (d).
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Frequently Asked
Questions
Q: May foreign entities (government agencies or contractors) place rated orders with U.S. suppliers?
A: Yes. Foreign entities may place rated orders with U.S. suppliers only with express written authorization of DOC/BIS on a case-by-
case basis where the procurement is deemed to be in the U.S. national defense interest. Special rules apply to the use of rated
orders in the United States by the Canadian Government and authorized Canadian contractors. Sections 700.56 and 700.57
provide more information regarding these provisions.
Q: Who is authorized to include priority ratings on contracts and purchase orders?
A: Certain U.S. Government agencies and the Canadian Government are authorized by the DOC to include priority ratings on
contracts and orders placed with U.S. contractors and suppliers in support of approved national defense programs. DPAS Schedule
1 lists the currently approved programs and the agency responsible for each program.
Q: Must a rated order be in writing or may I give it verbally to my supplier over the phone? May it be placed electronically?
A: Rated orders may be placed with suppliers either in writing or electronically. Regardless of common industry practice, if the
order is given verbally, it must be followed-up immediately either in writing or electronically. The elements of a rated order are
discussed in 15 CFR § 700.12.
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DPAS
Contact Information
101
U.S. Department of Commerce
Bureau of Industry and Security
Office of Strategic Industries &
Economic Security
Defense Programs Division
(202) 482-3634
DPAS@bis.doc.gov
www.bis.doc.gov/dpas
U.S. Department of Defense
Office of the Deputy Assistance Secretary of
Defense for Industrial Policy
(703) 697-0051
osd.pentagon.ousd-a-s.mbx.indpol-dpa-title-
i@mail.mil
U.S. Department of Homeland Security
Federal Emergency Management Agency
Office of Policy & Program Analysis
Defense Production Act Program Division
FEMA-DPA@fema.dhs.gov
http://www.fema.gov/defense-production-act-program
2/29/2024

End of Training Course
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DPAS Training Slides Final_November 2021.pptx

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